Be The Future Boss

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Be the future boss – find out how you can apply for business start-up loans and funding

Many small businesses face the challenge of gathering capital to start and/or expand their businesses.

Loans from the government can be a cost-effective means to get the funds you need, but there are important things to consider on the way – such as being prepared for a lot of paperwork, strict selection criteria, and a very long wait.

What is a business government loan?

Most loans for business come through the Department of Trade and Industry (DTI) and its associated organisations like the Small Enterprise Development Agency (SEDA).

These are loans tend to offer comparably lower interest rates to financial institutions, and have longer or more flexible repayment terms.

Do you have to repay a government loan?

Yes. Businesses that receive a loan from the government are still required to repay the loan in the same way they would if receiving finance from a bank. The difference is that interest rates are much lower and repayment terms longer or more flexible.

List of government loans for business

Isivande Women’s Fund is an exclusive women’s fund established by the DTI to accelerate women’s economic empowerment through affordable, usable and responsible finance. For more information visit their site.

Khula is the government’s agency for small business finance. It operates across both public and private sectors and is dedicated to providing much-needed funding to businesses. It serves as indemnity to financial institutes providing loans to businesses without assets to put up as collateral. Visit their site for more information.

National Youth Development Agency (NYDA) offers mentorship, development programmes, and grants and facilitates funding for youth businesses in South Africa. Visit their site for more information.

Who can apply for government loans for business?

Each of the loans listed above have their own qualifying criteria.

For Isivande Women’s Fund, applicants need to be:

  • At least six months in operation
  • Have a >50% women’s share and management
  • In need of start-up, expansion or growth capital
  • Have growth potential on a commercial scale
  • Able to improve social impact in the form of job creation and economic empowerment.

For Khula Fund, applicants need to be:

Able to provide as much as 10% of the amount they wish to borrow in the form of cash or equipment that can be used in the intended business.

For NYDA, applicants need to be:

  • Between the ages of 18 to 35
  • Have the necessary skills and experience or potential skills and experience to run a business
  • South African citizens
  • Involved in the day to day operations of the business
  • Growing a business that is commercially sustainable, viable
  • Profit motivated.
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